Amtrak 2014 Annual Report Download - page 63

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National Railroad Passenger Corporation and Subsidiaries (Amtrak)
Notes to Consolidated Financial Statements (continued)
1509-1694994 55
12. Postretirement Employee Benefits (continued)
Money Market Funds
Money market funds generally transact subscription and redemption activity at a $1.00 stable
NAV. However, on a daily basis the fund’ s NAV is calculated using the amortized cost (not
market value) of the securities held in the fund. It is generally accepted as industry best practice
that securities valued at amortized cost are Level 2 assets; amortized cost does not meet the
criteria for an “active market.” This factor was the primary determinant used by management to
assign a fair value hierarchy of Level 2 to money market funds. Amtrak’ s category of
investments in money market funds is comprised of JPMorgan 100% U.S. Treasury Securities
Money Market Fund. Management obtained and reviewed JP Morgan’ s Money Market Funds
Annual Report and reviewed the investment valuation for JPMorgan 100% U.S. Treasury
Securities Money Market Fund in the significant accounting policies section of the report, which
states that, “Each Fund has elected to use the amortized cost method of valuation pursuant to
Rule 2a-7 under the 1940 Act provided that certain conditions are met, including that the Fund’ s
Board of Trustees continues to believe that the amortized cost valuation method fairly reflects
the market based NAV per share of the Fund.” Investments in money market funds are classified
as Level 2 assets as of September 30, 2014 and 2013.
Real Estate Investment Trust
This category consists of an investment in the Morgan Stanley Prime Property fund. The fair
value of the investments in the Prime Property Fund has been estimated using the NAV of the
Plan’ s ownership interest (units) in the partner’ s capital. The investment in the Prime Property
Fund can be redeemed on a quarterly basis but with no guarantee that cash will be available at
any particular time to fund the redemption request. If the cash is not available, the redemption
will be deferred at the discretion of the fund manager until sufficient cash is available. As of
September 30, 2014 and 2013, there were no unsatisfied redemption requests. Investments in real
estate investment funds are classified as Level 2 assets as of September 30, 2014 and 2013.
Global Assets Allocation Funds
This category consists of BlackRock Global Allocation Class I fund (BlackRock), PIMCO All
Asset Institutional fund (PIMCO), and Stone Harbor Local Markets fund (Stone Harbor). The
BlackRock investment (fair value of $51.1 million and $47.3 million at September 30, 2014 and
2013, respectively) seeks to provide high total investment return. It invests in domestic and
foreign equities, debt securities, and money market instruments. The PIMCO investment (fair